Perspectives on Retail Loyalty-Program Participation and Perks
When it comes to shopping, there is no shortage of choice. Whether consumers shop a specialty retailer or a mass merchandiser, via a device or in person, they have never had so many ways to please the palate, discover the deal or pay the piper. Therefore it’s more important than ever before to engage with the customers you have to ensure you keep them hooked and a retail loyalty program can be exactly what you need to create competitive advantage and reduce the risk of your customers switching store to shop elsewhere.
Loyalty programs, in various guises, are well established in Europe. Some retailers offer stand-alone programs, while others are part of coalition programs that span several retailers. Some even offer multiple programs, providing short-term membership join-up opportunities to affiliate programs in addition to their own.
In a recent study, Nielsen asked global and European consumers about their thoughts and habits where retailer loyalty programs are concerned. In Europe, two-thirds of respondents who took part in the study said they belong to one or more loyalty programs. Participation rates vary widely, however. While a number markets in Europe reported some of the highest participation rates in the world (Finland, UK, Lithuania), others, such as Kazakhstan and Denmark reported some of the lowest.
Loyalty participation – how hooked are Nordic countries?
When looking closer at habits in the Nordic region, we see variation between our own countries. 94 percent of respondents in Finland say they take part in a loyalty program, which is the highest reported participation of any country within the study. However, fewer than half of respondents in Denmark (49 percent) say they take part in a program. Participation is higher in Norway (66 percent) and Sweden (62 percent).
When it comes to how loyalty programs facilitate membership, points collection and reward redemption, scanning a card in a store is the most common method used in every country in Europe (69 percent). It is particularly dominant in some markets, such as Finland, where this method is cited by 93 percent. Three quarters of people involved in loyalty-programs swipe a card in Sweden, 72 percent in Denmark and 69 percent in Norway.
Like most loyalty-program participants around the world, the majority of Nordic members want to earn rewards across channels and have the freedom to choose from several redemption options. Three-quarters of Danish loyalty-program members rate rewards for purchases as somewhat or highly appealing, followed by the Swedes (71 percent), Norwegians (67 percent) and Finns (65 percent).
Monetary rewards – particularly product discounts – prove enticing for European loyalty-program participants overall. However, Nordic consumers buck this trend. Though product discounts are the preferred benefit cited across the whole region, rebates or cash back are preferred in Nordic markets, cited by 70 percent in Finland, 59 percent in Norway, 58 percent in Sweden and 55 percent of members in Denmark.
Across Europe, few loyalty-program participants cite non-monetary benefits amongst their top incentives, but these benefits are important in some markets. While only 14 percent of European participants as a whole say exclusive access to sales or special merchandise is one of their most-valued benefits, these perks are highly valued in Finland, with 55 percent of respondents mentioning them. In contrast, 17 percent of Norwegians, 16 percent of Danes and only 5 percent of the Swedes say that this benefit is important.
The Nielsen Global Retail Loyalty-Sentiment Survey polled more than 30,000 online respondents in 63 countries to understand what drives consumers to participate in retail loyalty programs. We examined self-reported participation rates, the rewards or benefits valued most, and the features that are most appealing in the loyalty programs of the future. Finally, we provide insight into the ways to build and maintain a winning loyalty program.
Country-level data is available on Nielsen Store.